Think You Can’t Pay Off $147,106 in Debt? Guess Again.

The Conformist Majority says: “I have a 30-year mortgage, a 20-year second mortgage, a 10-year student loan and a 5-year car loan.”

“I’ll pay the minimum, and hold those debts for 30, 20, 10, and 5 years. After all, why deprive myself while I’m young?”

Worse, they’ll ask:

“How can I stretch these loans out even longer? A lower monthly payment means I can get granite countertops. Score!”

They tell themselves this is normal. And the scary truth is, that’s true. It IS normal.

But it ain’t right.

******

Then there are the Rebels.

Like all humans, Rebels aren’t perfect. They’ve made mistakes — sometimes gigantic mistakes — but they don’t get defensive and wallow and make excuses. They get powerful.

They morph their missteps into the rocket fuelthat powers their inner strength. They stoke the fires of ambition and optimism and a take-no-prisoners empowerment attitude. They defy the conformist cultural norms that whisper “follow the crowd” and instead, in an act of ultimate rebellion, break the debt shackles that bind their wrists. They are free; they are powerful; they are us.

Rebel #1: Jackie and Miles Beck

Words of wisdom: “Becoming debt-free is do-able, so long as you’re willing to do what it takes.”

Their Road to Freedom

At the peak of their debt, Jackie Beck and her husband Miles had racked up $17,000 on credit cards, $35,000 in a combination of student, car and home improvement loans, and a $95,000 mortgage balance. (They both entered their relationship with existing debts.)

The consequences of this debt came to light when Jackie read a little book that radically transformed her perspective on money. This book, Your Money or Your Life by Vickie Robin and Joe Dominguez, is a financial freedom classic: it shows that you trade your most limited and precious assets, time and energy, for money — and this is, by definition, an unsustainable exchange.

Jackie and Miles realized they need to revolt against the norm — and that starts with decimating their debt. First, they tackled their credit cards, using a consumer credit counseling service to negotiate a three-year payment schedule.

Most people would be happy to stop there. But they’re Rebels. They kept going.

Next came Jackie’s student loans, Miles’ car loan and their home improvement loan —- Bam! Bam! Bam! They wiped out another $35,000 over three more years.

The last step was tackling their mortgage, which had a balance of $95,000. From 2009 to 2012, they threw every penny at paying this down, managing the impressive feat of paying down the last $49,500 over the course of just one year. Boo-yah!

How did they do it?

Their Strategy

The road to freedom isn’t always smooth.

At one point, Jackie lost her job and remained unemployed for four excruciating years. But she created her own opportunities: She launched her own business (while job hunting) to replace some of her lost income.

She eventually found a job that paid $2,100 per month. “After years of living on nothing … it felt like a fortune to me, and I decided to pay off my long-deferred student loan, which had a balance of $9,759.46 left on it,” she says.

She wiped out that loan in 5 months. Boom!

That’s commitment, folks. You have to want it.

“I woke up every single day thinking about how I could pay off the debt as quickly as possible,” she says.

The couple didn’t encounter smooth seas throughout their entire journey. In addition to Jackie’s prolonged unemployment, they faced plenty of unexpected expenses: surgeries, emergency vet visits, even a car accident that resulted in major repairs. Yet they kept a laser-focus on their goal.

Here are some of their tips:

Transform your lifestyle. They’d been funding their lifestyle through debt. They learned to instead focus on building savings and acting resourceful. A little creativity and hustle goes a long way.

Give every dollar a job. When Jackie brought in extra money through her side business or Miles brought home extra money through odd jobs, they threw as much extra cash as possible towards paying down debt. They didn’t give into lifestyle inflation; they stayed focused on their ultimate goal.

Start small. When they decided to pay off their mortgage, they started with a tiny step: pay an extra $35 a month. Once they achieved that small victory, they scaled up.

Be patient. Jackie describes the debt payoff journey as a “hockey stick” —- if you viewed it on a graph, it would look like a lot of gradual progress over a long period of time, then one final up-tick at the end. The trick is to stay motivated and focused on the long-term goal, even when it feels like you’ve got a way to go.

How She Kicked Butt, Paid Off Her Loans, and Lived Happily Ever After

Shortly after I met her, I told Will: “LaTisha is destined for success. She’s got the hustle, the heart. She’s got the brains and the fire in her belly.”

And I’m besides myself with joy to see her now: Debt-free, self-employed, location independent, and in amazing physical shape. Yeah girl!!

When LaTisha decided to get serious about paying down her debt, she was already delinquent on her accounts. Without a job lined up after graduating from college, she’d been living with her parents and hadn’t been making payments on her loans. She was getting nasty calls from creditors. She was stressed.

When she landed a job, she took action. Over the course of three years, LaTisha paid down her debts and developed a laser-focus on controlling her spending.

Look closely at those numbers. LaTisha saved 56% of her income, while making less than $4,000 per month. She spent more money on decimating her debt than she spent on rent, food, gas and every other bill, combined.

She increased her savings by an extra 2 percent!She’s now saving 58% of her income!!!! Yeah!!! (Note: The naysayer conformist trolls who like to foist their own internal self-doubt on other people will say things like “Only rich people can save 50% of their income.” To those people, whomever you are, I point to LaTisha’s example. Case closed.)

LaTisha’s next big goal is paying off her $65,000 in student loans over the next three years, traveling internationally, and getting married (with an ultra-frugal wedding) this March. (I’ll be there!)

Her Strategy

Conformists view their first post-college full-time job as an excuse to live it up after years of slumming it as a student. But LaTisha wasn’t afraid to rebel against that peer pressure and think outside the bars.

Here are some of her winning tactics:

Budget, budget, budget. She knew where every dollar was going. She planned out her month’s expenses and structured her budget around her main financial priorities (decimating debt). She paid for things in cash only to avoid temptation, and she gave herself a $50 cushion each month so she felt she had a little breathing room.

Know the difference between needs and wants. LaTisha realized a good portion of her debt came from impulse purchases. She loved shopping and dining out, but she learned to find other ways to entertain herself, like playing dodge ball on the weekends. She also taught herself to resist the urge to buy things on the spot, even (especially) when they’re on sale.

Shop smart. LaTisha has a ridiculously low food budget (between $51 – $81 a month). She stocks up on sale items, freezes what she won’t use immediately, and went vegetarian for a while to eliminate the cost of meat.

Rebel #3: Travis and Vonnie Pizel

Total Debt Conquered: $109,000

Type of Debt: Credit cards

Time Period: 55 months (2009 – 2014)

Word of Wisdom: “The most important thing I’ve learned during this process is that being a provider for my family doesn’t just mean buying everything they want. The root of our financial problems was the simple error in judgment of equating saying ‘No’ with failing as a husband and as a provider. A true provider does what is best for the long-term success.”

Their Amazing Journey

The Pizels’ debt story is one that’s all too common. Travis is a software engineer. He and his wife Vonnie earn a combined six-figure income, easily enough to take care of their two children. They live in Minnesota, where the cost of living is reasonable.

Then Travis opened one credit card, which soon become three credit cards, and before he knew what had happened, he had 13 open lines of credit, started hiding debt from his wife and began staying up at night trying to figure out how to keep the family afloat.

At the height of their debt, the Pizels owed $109,000, which they’d accumulated over a decade. When one of their creditors increased the minimum monthly payment, the bottom fell out.

The Pizels couldn’t pay the higher credit card minimums, which required several hundred extra dollars each month. They had reached a wall: they either needed to find a way to deal with their debt, or face bankruptcy.

Their Strategy

The Pizels found a debt management company that helped them lower their interest rates and develop a 57-month payment plan. This plan didn’t just aggressively help them pay down their debt, it also eliminated the risk of falling back into debt by freezing their credit accounts.

They paid $2,489 per month for 55 months.

Here are some of the key strategies that helped the Pizels escape from debt:

Question everything. At first they began with the “normal” spending cuts — get rid of the landline, cable TV and restaurant dinners. But then they had to get creative. Weekend trips? Gone. That 500-gallon hot tub in the backyard? Gone. School fundraisers? Sorry, kids — Mr. Travis going to have to say no, but he’ll support the school by volunteering for the PTA Board.

Get your family on board. Travis and Vonnie made the bold choice to be transparent with their kids. They told the children that they were in debt and explained how it would affect their family. This not only made it easier to explain the sudden budget cuts; it also taught their kids great lessons on money management.

(Their 10-year-old daughter Tori wrote an amazing blog post about the experience. “Mom explained to me how debt is when we spend more money than we had and we had to pay it back,” she says. “… I know now that if you don’t have a budget and you spend more money than you have, you’re in big trouble!”)

Comments

Paula, I know it can be done. We paid off £100,000 ($157,000) worth of debt (and interest) in three years and one week. Looking back, it was so empowering. Our strategy was simple: rationalise spending, increase earning (by a lot) and throw it all on the debt. It works. I just wish, I got mad about the debt earlier :).

This is very inspiring for people with debt. It only proves that with hard work and determination you can become debt free. The common denominator for all of these people was passion. Passion to live a better life…awesome.

This is precisely the type of information that the world needs to see. Real people with real stories about becoming debt free. It just goes to show that anybody can become debt free if they really want it. Great article.

Currently trying to tackle $40,000 in credit card and school debt plus $120k for a new mortgage with my fiancée. Right now I’m self employed and just went through two slow months, but the upcoming months are looking amazing and so I’m trying to get back in the groove of paying off debt and saving money too!

Such cool stories! Old readers might know that we paid off our mortgage ($104k)…but I don’t know if it’s really a success story or not. Big time opportunity costs paying down our debt that aggressively.

Gogogogogo, Cha Ching! I’ve been there and done that and can you it feels great to be debt free. You can do it! PROTIP: Once the debts are extinguished, save and invest what used to be your monthly payment. I went FIRE about 3 years after extinguishing my mortgage.

Yes! You can do this! You have to have a one-track mind to pay off debt. And a passion. We paid off $17,000 in student loan debt in 5 months and then bought a furnished condo for $240,000. As of today I am happy to say we have paid our mortgage down $79,000 – in 17 months! We want to have it paid off in the next five years. As for credit cards – we pay our balances in full each month.

I’m an Aussie and I found your blog a week ago and I can’t tell you how much I LOVE it! Its such a relief to find other people who have the same beliefs as me when it comes to money and work!
My story is that I saved $10,000 in 8 months in 2009/2010. I quit my job, took off overseas and had the time of my life for a year. Then I fell pregnant, returned home, unemployable. Then my relationship broke down and I found myself as a sole parent with a 15 month old, no savings, no money, working part-time. I moved in with my parents, upped my hours at work, cut out all unnecessary costs, saved like crazy. A year later I had a down payment on my first house (on one acre!), which I rent out and continue to live at my parents to save money. Fast forward another year to today and I’m about to build another house on my acre and rent it out too. If I keep at it, I should be mortgage free in 7 years and have three properties.

Love reading stories of people knuckling down and wiping out their debt! I stumbled upon your site a few months ago and really enjoy reading your articles and following your rental property adventures. Someday I’d like to explore that avenue. Here’s my story and journey so far:

I am 21 years old and the only loan I have ever had was a $3,500 loan from my grandfather for some school related expenses. I got a job and started living on my own making about $1800/month take home pay. I payed $675/month for rent and payed the loan off at about $600/month.

I also started an emergency fund and had about $1500 when I had no work for a week. I was not worried at all and resumed work for another two months before getting completely laid off. I was out of work for 1.5 months after that, but still had about $800 when I found work again.

Now, I make about $2100/month and I have added a roommate to my 450 sq ft. studio so my rent is now $350/month! I am able to save roughly 60% of my income and I do not feel like I am struggling Right now I am saving for a 2-month road trip around the U.S. Very excited!

Love it. These are all such awesome and inspiring people! You’re so right–it’s all about how badly you want it. That’s how we approach our FI plans and achieve our aggressive savings rate. If you want something badly enough, you will absolutely make it happen.

I had to laugh at the Pizel’s DIY approach–that’s exactly what my husband and I do! We try not to outsource anything that we can figure out on our own. Turns out, we can figure out pretty much anything that comes our way (knocking on wood now…. 😉 ).

Thanks for the great post, Paula. Perhaps the most amazing thing about this is that those folks who paid off their debt tended to increase their income (significantly) over that period. I agree the mindset of debt reduction not only reflects on spending reduction, but income creation.

I plan on cutting my $34k in consumer debt by more than half this year and completely next year. Mostly through selling our ridiculous fleet of cars.

Awesome to read these stories. From 2009-2014, I worked 3 jobs and was able to pay off $54,000 (student & car loans) and save $60,000 as an emergency fund and down payment on my first home. Now that I’m a homeowner, my only debt is my mortgage and I am paying extra each month to crush it as soon as possible!

Paula, i share your articles with our 3 kids, my wife and i are cut from the same debt free cloth, we where lucky enough to be born rebels, college graduation debt free, bought a house, paid it off “over $200,000 in 4 years 7 months, we called it the bunny ear strategy, bunny ear antennas where free, cable not, that money was to pay down debt, life becomes so relaxing when you do it on your terms and know one owns you.

Those stories are definitely inspiring. I was able to accomplish the same goals just on a smaller scale. About 4 years ago I was a 265lb pound dude with about $20k in debt. Although I kept a positive exterior on the outside I was pretty depressed about where I was going with my life. I didn’t know how to change, than, I had an eye opening visit with my doctor. She was pretty blunt with me, and told me changes had to be made. I made the changes I needed to make. First with the weight where I ended up losing 100lbs in a year. Than with my confidence sky high I tackled that debt and went from deep in debt to looking at life with an early retirement with a saving % over 50, the last couple of years. Thanks to bloggers like you and MMM, among many others, who showed me I can. Now I want to tackle real estate, which really intrigues me!! Keep doing what you’re doing!!!

Very good stuff. Most people just get depressed in these kind of situations and never even try hard enough to get out and rather choose to give up and blame the whole situation on someone else like the government, the capitalists, the system, Obama etc.

It all begins with getting yourself together and implementing real change.

For us, it was the concept of “paying ourselves first.” Extra mortgage payments were put on automatic bill pay and we thought of that amount as what we owed every month. Any random money that came our way usually went toward the mortgage, too. It became a game. The main motivation was wanting financial flexibility, but we also wanted to pad the pockets of the bank as little as possible. 🙂

I love seeing the stories laid out so succinctly, with the details. Those are big, big numbers that those folks managed to conquer, one dollar at a time. LaTisha’s tiny budget blows my mind, you go LaTisha!

Last year was our freedom shout! We concurred over 100k of debt in just 3.5 years. Its funny because we really were only focus on student loans but then we realized we could pay off the cars too.

We will see how we adjust. We always spent more on debt repayment and savings then our living expenses so we will have to make a conscious effort to not inflate our life style. So now we are aggressively maxing out 401ks and saving for house down payment.

These are great examples of regular people making a choice to take control. It is very inspiring to read! I made the choice a few years ago and got my wife on board. We are making incredible progress towards saving for our financial independence and early retirement.

This reminds me of a quote that I keep hanging in my office and is written on the wall in the garage where I workout.

“Live a few years like other are unwilling to live, so that you can live the rest of you life like other can’t.”

If you want to be a conformist than you can’t expect anything better than average. You will likely be in debt most of your adult life and will not have the choice to spend your time as you wish. You best bet for retirement will be in your 60’s.

But I truly believe if you will be contrarion (or a rebel as this post describes it) and go against the norm you will have options most will never have. Imagine what it feels like to be debt free including your mortgage.

I had my own awakening over the past 6-months. My wife and I are high income earners, and have made decent financial decisions. But I realized recently that in the next 7-years we will earn $1.4M…when I saw that, I immediately thought to myself that it would be financially irresponsible of me not to pay off a our mortgage of $350K.

Looking forward to hosting that mortgage burning party before we celebrate our 35th birthday.

These stories are awesome! I paid off $95,000 in debt in 5 years. It took a ton of sacrifice and diligence but my oh my LIFE IS GOOD! I truly believe living debt free is the secret to a fulfilling life. Slave is borrower to the lender – who wants to be a slave?

Awesome to read these stories. From 2009-2014, I worked 3 jobs and was able to pay off $54,000 (student & car loans) and save $60,000 as an emergency fund and down payment on my first home. Now that I’m a homeowner, my only debt is my mortgage and I am paying extra each month to crush it as soon as possible!

This is so inspiring! It’s great to see that people actually CAN pay off the debt in an economy and world that truly makes you feel like you can’t. My wife and I added up our debt to a total over over 196,000 dollars! Which is insane and terrifying!

So far we have paid off almost $8,000 and hope to continue and have it paid off in a few years. Stories like this truly inspire us to keep going.

This is exactly the encouragement I needed this morning after a rude awakening (literally & figuratively) that I am on the brink of financial disaster due to about $110k in debt (98% is just student loans!) and a low income. Within minutes of waking up to this realization, I came up with a new aggressive plan to get debt free & financially stable.

Cutting to the chase. My son was abducted and abused by his mother 6 years ago. This meant heavy legal fees to get him back safely into my life and bring normality into his. Unfortunately there was NO alternative but to access my super, use credit cards and savings to pay legal fees. Now I have no super, the tax office is auditing and issuing fines on me.

Surprisingly maybe, my debt is $68k. I have been slowly chipping away at it. I am 51 years old so am aiming to get it burn away before I am 60. Raising children does put a slightly different spin on budgeting but it may set my son off more appropriately lessening the importance of ‘conformance’.

I’m committed after reading so many awesome blogs. Right now we have $16K in credit cards, $9K in a personal loan and $36K in student loans. And we are working on only one income here 🙂 I decided to tackle the credit cards first – baby steps – and do some small things to create side income. One month in and so far, so good!

I owed $200,000+ interest of 6.8% from student loans after graduating from grad school. Today we officially knocked that loan out within 3 years and 5 months. We also managed to have 2 kids and 2 new cars during that time. It took a lot of sacrifices and hard work but I glad that we are done!

I suggest not getting debt in first place. It tends to make getting out of debt not much of a problem. “Don’t buy stuff you cannot afford!” Steve Martin. And yes this means no debt for a house, a car, a boat, an RV, an education, and so on. And yes, this means on a single income, with kids. How can this be so??? Ok, here comes the answer. HARD WORK. Work your tail off to get good grades inhigh school and work your tail off to save $ for college. Go to a mid-level scholl and Walah!!! You just got a 4 year degree without borrowing a dime. Then get an advanced degree (preferably a PhD) in field that pays well over $100k to start… and PAYS YOU to get the degree as a teaching assistant or research assistant. Rent to start, buy enerything used, no need for a second income, and you my friend will never be in debt. Isn’t it great that the answer has everything to do with hard work, making good choices, and not choosing a worthless major? Imagine that.

I’ve read this several times since I’ve committed to paying off my almost $100K in student loan debt…it’s so encouraging for me to read about others who have annihilated a similar debt! Thank you and Congrats!!!

Paula – we’ve crushed just over $100k in student loan debt in almost exactly a year! We have about $25k remaining and are on track to knock that out in the next 10 months. Huge reasons for success: selling our house and renting – cashing out our (market inflated) equity and throwing it all to debt. Reducing from a 2 -car to a 1-car household. Reducing eating out. Learning about travel hacking and using it to our advantage to take 6+ trips a year….and all of this while we’ve change from a 2 parent working household to a 1 parent working (for the man) 1 parent staying at home (working for the child).

We have achieved huge success and realized new goals for our future. Thanks to the likes of you, MMM, Mad Fientist, JR Collins, etc etc etc, we have a focus on our future that doesn’t contemplate working until we are 70.

Love the inspiring stories especially the Beck’s story. They remind me of my wife and I! I wish I had come across this post years ago! My wife and I were able to take the tips Jackie and Miles mention and we paid off our mortgage of $107,000 in 19 months! If you couple discipline and patients to a goal you’re unstoppable!!!!

These are good examples, and drives home the point that income and (at least) a living wage make a HUGE difference for folks looking to get out of debt. All of these examples had commitment and discipline, but they also had sufficient income to be able to afford debt management above and beyond their living expenses. Right now, my husband and I (both college educated, but bringing in only $3500/month from our human services jobs) struggle to even get food on the table for our kids. We live in a California town where rent has gone from $800/month to $1800/month in less than 10 years (thanks, Silicon Valley) which makes it hard to see how we’ll ever stay current on day-to-day bills AND pay back student loans. It might be time for at least one of us to make a career change. Sad to leave the meaningful work we’ve found helping others, but apparently necessary in order for us to help ourselves pay for past mistakes. I can only imagine what families without the “career change” option would have to do in order to get free from debt, especially unexpected stuff like medical bills.

Thank god for this post. After a horrible weekend of hitting rock bottom when I finally faced my lifetime of irresponsible spending and debt accumulation might mean I have no retirement and no money to help my kids with college I was nearly suicidal. Your stories make me see it’s possible to turn it around. 68k in student loans, 35k credit card debt and 20 to pay back 401k loan. But my husband and I make 250k annual so I know it’s do able I just have to swallow my pride and talk to him about it.

This blog post was published almost three years ago and has 50 comments. Assuming I successfully read every comment (meaning I didn’t accidentally skip any), I noticed that only the second-to-last and third-to-last comments highlight that some people’s life situations may prevent them from being able to pay down their debt. I’m surprised that over the course of the last three years, and 50 comments, only two people (and only in the last half of year) highlighted this fact. I suspect more people in the past made similar comments, however, I could be wrong even though it seems very unlikely.

So my question for Paula is, have you ever removed any comments from this blog post that indicated that some people cannot pay back their debt? If you have done this you might be reluctant to publicly admit doing so. However, I invite you to be honest if you find yourself contemplating being dishonest about having ever removed any such comments.

Being able to have an honest conversation about all the types of debt-laden situations people find themselves in is more likely to be helpful to more people than a conversation that artificially promotes a skewed perspective, IMHO.

Hi Cindy – I’m Erin, Paula’s assistant. I handle comment moderation on the site. I can assure you we’re not hiding anything here. The only comments I don’t publish are spammers, or folks who aren’t respectful and aren’t furthering any sort of conversation.